If you were wondering how substantial a role pension benefits play in the economyat large, particularly as defined benefit plans are increasinglygiving way to defined contribution plans such as 401(k)s, a newreport has examined just that question.

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A report from the National Institute on Retirement Security,“Pensionomics 2016: Measuring the Economic Impact ofDefined Benefit Pension Expenditures,” found that economicgains attributable to defined benefit pensions in the U.S. are“substantial.”

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Related: California court case opens door to pension benefitreductions

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Retiree spending of pension benefits in 2014 generated $1.2trillion in total economic output, supporting approximately 7.1million jobs across the United States. Pension spending also madeup a substantial portion of government income from taxes, withretirees paying a total of $190 billion in federal, state and localtaxes on their pension benefits and spending during 2014.

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The report provided such details as the fact that nearly $519.7billion in pension benefits were paid to 24.3 million retiredAmericans. That broke down into $253 billion paid to 9.6 millionretired employees of state and local governments and theirbeneficiaries (typically surviving spouses); $78.8 billion paid to2.6 million federal government retirees and beneficiaries; and$187.9 billion paid to 12.1 million private sector retirees andbeneficiaries.

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Not only did that money serve to support 7.1 million jobs, whichpaid aid $354.8 billion in labor income, it also supported $1.2trillion in total economic output nationwide and $627.4 billion invalue added (GDP).

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In multiplier effects, the study said, each dollar paid out inpension benefits supported $2.21 in total economic outputnationally. The industries that saw the largest employment impactswere the food services, real estate, health care, and retail tradesectors.

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Defined benefit pensions provided more reliable support to theeconomy, the report said, because recipients are lessreluctant than recipients of income from 401(k) plans to spend thatincome, particularly if the latter experience market downturns thattake a toll on their savings. In fact, the study compared thestabilizing effect of defined benefit pensions on the economy tothat of Social Security.

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